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Corresponding to the spike in bond yields two weeks ago, GLD dropped 5% and the equivalent of 2.3 standard devs from Jan 5 to Jan 8. That’s a big move for GLD, but not unheard of this year, which has punished gold bugs hoping that the political uncertainty would push their precious little metal higher. Rather, GLD has been in a range for the past five months. Even the fiscal uncertainty that bashed bonds really hasn’t had that big an impact on GLD, which might suggest that GLD might not make a big move in their direction for a while. Even though GLD’s IV rank is 20%, its 18% IV is in the middle of where it’s been since May, and 50% higher than where it was prior to spiking back in March. That’s high enough to find attractive short premium strategies. If you think that GLD will trade in a range for the next few weeks, the short iron condor that’s long the 163 put, short the 166 put, short the 184 call and long the 187 call in the March expiration with 56 DTE is a neutral strategy that collects a credit 1/3 the width of its strikes, has a 72% prob of making 50% of its max potential profit before expiry, and that generates $.88 of positive daily theta.
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